Capitaly early access is opening now. New insights every week on venture and fundraising.Subscribe on Substack
Capital raising glossary
Valuation cap
The maximum valuation at which a SAFE or note converts.
Definition
A valuation cap sets the highest company valuation used to convert a SAFE or convertible note into equity. If the next round prices above the cap, early investors convert at the cap instead, rewarding them for backing the company sooner. It is one of the main levers founders and investors negotiate early on.
Related terms
Run your next raise on Capitaly.
Find investors, build your data room, and manage the whole round with AI. Set up your workspace in minutes.